Traders in the interest-rate options market are showing a bearish sentiment, indicating their expectation of a significant selloff in Treasury bonds. Put options on 10-year Treasury notes, particularly those expiring on December 27, are in high demand, suggesting that market participants are hedging against a potential increase in Treasury yields.
The intensity of positioning in February options, which expire on January 24, aligns with the week of President-elect Donald Trump's inauguration, leading to speculation about upcoming market movements. As traders prepare for volatility, the focus remains on the implications for interest rates and the broader financial landscape.